LUXEMBOURG--(BUSINESS WIRE)--Intelsat S.A., the world’s leading provider of satellite services, today
reported financial results for the three months ended March 31, 2012.

“With contracted backlog of $10.5 billion providing
visibility for future revenue and cash flows, we are focused on our 2012
investment program, which involves the launch of four additional
satellites, providing incremental capacity to support future customer
growth.”

Intelsat S.A. reported revenue of $644.2 million and a net loss of $24.4
million for the three months ended March 31, 2012. The company also
reported Intelsat S.A. EBITDAi, or earnings before net
interest, loss on early extinguishment of debt, taxes and depreciation
and amortization, of $481.2 million, and Intelsat S.A. Adjusted EBITDAi
of $496.7 million, or 77 percent of revenue, for the three months ended
March 31, 2012.

McGlade continued, “With contracted backlog of $10.5 billion providing
visibility for future revenue and cash flows, we are focused on our 2012
investment program, which involves the launch of four additional
satellites, providing incremental capacity to support future customer
growth.”

Business Highlights

Intelsat’s media business announced a number of new agreements and
customer renewals and expansions reflecting the global footprint of
the Intelsat fleet, Intelsat’s support of DTH platforms and the value
of our regional media distribution neighborhoods.

Discovery Communications, the world's number one nonfiction media
company, recently signed a multi-year agreement to expand its use
of capacity serving numerous Latin American countries, including
Brazil and Argentina. The agreement will allow Discovery to
deliver high definition channels both to cable and Direct-to-Home
(DTH) providers in the region. The capacity on Intelsat 9 at 302°
East will transition to Intelsat 21 once that satellite enters
service later this year.

STN, Ltd., a leading broadcast-over-satellite provider, recently
signed a multi-year agreement for additional capacity on Galaxy 19
for DTH services over the United States, and uplink services from
Intelsat’s Mountainside teleport in Maryland. STN provides
international programming on Intelsat’s premier free-to-air U.S.
multicultural DTH community, which offers nearly 250 channels.
Located at 97° West, Galaxy 19 provides complete coverage of the
continental United States, the Caribbean, Alaska and Hawaii.

VSAT Systems, an independent teleport operator, satellite
wholesaler and retailer, recently extended its capacity agreement
on Galaxy 28 at 89° West for coverage over North America. The
company uses the satellite capacity to provide communications
services to its enterprise, oil and gas, and disaster recovery
customers.

Banking services provider eProcess International SA., an affiliate
of Ecobank Group, a pan-African banking group, renewed and
expanded its service commitments under a multi-transponder,
multi-year contract for capacity on the Intelsat 903 satellite.

Intelsat’s government business executed contract renewals and
expansions reflecting solid demand for mobility applications with the
high reliability and coverage of Intelsat’s extensive fleet.

Intelsat’s indirect, wholly-owned subsidiary, Intelsat General
Corporation (IGC), was awarded a renewal of a Future COMSATCOM
Services Acquisition (FCSA) contract for multiple off-net
transponders for the provision of in-theatre communications. In
addition, IGC was awarded a multi-year contract for on-net
transponder and terrestrial networking services in the Pacific
Ocean region for the U.S. Government.

Intelsat's satellite investment programs covering 10 satellites
launching from March 2012 through 2015 continue to progress. Intelsat
22 launched in March, and is expected to complete in-orbit testing and
enter into service in the second quarter of 2012. Intelsat 19 is
expected to follow with a second quarter 2012 launch provided by Sea
Launch.

Intelsat’s average fill rate on our approximately 2,075 station-kept
transponders was 79 percent at March 31, 2012.

On April 23, 2012, Intelsat Jackson repaid $50.0 million of the $175.0
million outstanding under its revolving credit facility.

On April 26, 2012, Intelsat Jackson completed an offering of $1.2
billion aggregate principal amount of its 7 ¼% Senior Notes due 2020.
The net proceeds from the offering were, or are expected to be,
primarily used to repurchase or redeem all of Intelsat Jackson’s
outstanding 9 ½% Senior Notes due 2016 and up to $470.0 million
aggregate principal amount of its outstanding 11 ¼% Senior Notes due
2016.

Financial Results for the Three Months Ended March 31, 2012

On-Network revenues generally include revenues from any services
delivered via our satellite or ground network. Off-Network and Other
revenues generally include revenues from transponder services, Mobile
Satellite Services (“MSS”) and other satellite-based transmission
services using capacity procured from other operators, often in
frequencies not available on our network. Off-Network and Other Revenues
also include revenues from consulting and other services and sales of
customer premises equipment.

Revenue for the three months ended March 31, 2012, increased by $4.0
million, or 1 percent, to $644.2 million as compared to $640.2 million
for the three months ended March 31, 2011. By service type, revenue
increased or decreased due to the following:

On-Network Revenues:

Transponder services—an aggregate increase of $12.7 million,
primarily due to a $12.5 million increase in revenue from growth in
capacity sold to media customers primarily in the Latin America and
Caribbean, the Europe and the North America regions, as well as a $3.8
million increase in revenue from capacity sold by our IGC business,
partially offset by a $3.6 million decrease in revenue from network
services customers.

Managed services—an aggregate decrease of $5.0 million largely
due to a decrease in revenue from network services customers for
international trunking solutions primarily in Africa, a trend that we
expect will continue due to the migration of services in this region
to fiber optic cable.

Channel—an aggregate decrease of $3.5 million related to a
continued decline from the migration of international point-to-point
satellite traffic to fiber optic cables, a trend that we expect will
continue.

Off-Network and Other Revenues:

Transponder, MSS and other off-network services—an aggregate
increase of $5.0 million, primarily due to a $5.0 million increase in
customer premises equipment revenue and a net $2.1 million increase in
off-network transponder services largely related to contracts being
implemented by our IGC business, partially offset by a $2.1 million
decline in usage-based mobile satellite services ("MSS") revenue sold
by our IGC business.

Satellite-related services—an aggregate decrease of $5.2
million, due primarily to lower professional fees earned for providing
government professional services and flight operations support for
third-party satellites following the conclusion of certain contracts.

Changes in direct costs of revenue, selling, general and administrative
expenses, depreciation and amortization, income from operations, and
interest expense, net, are described below.

Direct costs of revenue of $105.0 million for the three months ended
March 31, 2012, were flat compared to the three months ended March 31,
2011. Direct costs of revenue increased by $3.3 million due to higher
costs of equipment and a net $1.4 million increase in miscellaneous
expenses, partially offset by a $1.8 million decrease in the cost of
MSS capacity purchased related to solutions sold by our IGC business
and a $2.9 million decrease in costs related to earth station
operations.

Selling, general and administrative expenses decreased by $0.6
million, or 1 percent, to $51.0 million for the three months ended
March 31, 2012, as compared to the three months ended March 31, 2011.
The decrease was primarily due to $1.2 million of lower non-cash stock
compensation costs associated with our share incentive plan and a $4.0
million decrease in professional fees, partially offset by a $2.1
million increase in bad debt expense, as compared to a credit in the
first quarter of 2011 due to better than expected collections, and a
$1.1 million increase in other staff-related expenses.

Depreciation and amortization expense decreased by $8.1 million, or 4
percent, to $186.9 million for the three months ended March 31, 2012,
as compared to the three months ended March 31, 2011. This decrease
primarily resulted from reduced depreciation expense due to the timing
of certain assets becoming fully depreciated and changes in the
estimated useful lives of certain satellites, together with variation
from year to year in the pattern of consumption of amortizable
intangible assets. Those decreases were partially offset by increases
due to satellites placed into service in 2011.

Our income from operations increased by $1.2 million to $291.5 million
for the three months ended March 31, 2012, as compared to $290.3
million for the three months ended March 31, 2011, due primarily to
the effects described above, including higher revenue and lower
depreciation expense and selling, general and administrative expense.
Income from operations was further affected by:

a $9.9 million loss recognized on our derivative financial
instruments for the three months ended March 31, 2012, related to
the net loss on our interest rate swaps, primarily due to interest
expense accrued on the interest rate swaps, partially offset by a
gain related to the change in fair value. For the three months
ended March 31, 2011, we recorded a gain of $1.7 million on
derivative financial instruments.

Interest expense, net consists of the gross interest expense we incur
less the amount of interest we capitalize related to capital assets
under construction and less interest income earned. As of March 31,
2012, we also held interest rate swaps with an aggregate notional
amount of $2.3 billion to economically hedge the variability in cash
flow on a portion of the floating-rate term loans under our senior
secured and unsecured credit facilities. The swaps have not been
designated as hedges for accounting purposes. Interest expense, net
decreased by $37.4 million, or 11%, to $311.4 million for the three
months ended March 31, 2012, as compared to $348.8 million for the
three months ended March 31, 2011. The decrease in interest expense,
net was principally due to the following:

a net decrease of $30.5 million in interest expense resulting from
our refinancing transactions, redemptions and offerings in 2011;
and

a decrease of $5.1 million from higher capitalized interest
resulting from increased levels of satellites and related assets
under construction.

The non-cash portion of total interest expense, net was $15.4 million
for the three months ended March 31, 2012, and included $1.0 million of
payment-in-kind interest expense and $14.4 million primarily associated
with the amortization of deferred financing fees incurred as a result of
new or refinanced debt and the amortization and accretion of discounts
and premiums.

Loss on early extinguishment of debt was $168.2 million for the three
months ended March 31, 2011, with no similar charge during the three
months ended March 31, 2012.

Other income, net was $2.9 million for the three months ended
March 31, 2012, as compared to $3.9 million for the three months ended
March 31, 2011. The decrease of $1.0 million was primarily due to a
decrease in exchange rate gains related to our business conducted in
Brazilian Reais and Euros in 2012.

Provision for income taxes was $7.2 million for the three months ended
March 31, 2012, as compared to a benefit from income taxes of $7.0
million for the three months ended March 31, 2011. The difference was
principally due to a release of withholding tax liabilities resulting
from certain sales in the Asia-Pacific region as well as the
refinancing expenses and changes in the balance of deferred taxes as a
result of a 2011 reorganization, both recorded in the three months
ended March 31, 2011, and due to a 2012 internal subsidiary merger
which caused a re-measurement of our deferred taxes in the quarter
ended March 31, 2012.

EBITDA, Intelsat S.A. Adjusted EBITDA and Other Financial Metrics

Intelsat S.A. EBITDA of $481.2 million for the three months ended March
31, 2012, reflected a decrease of $8.0 million from $489.3 million for
the same period in 2011. Intelsat S.A. Adjusted EBITDA decreased by $3.0
million, or 1 percent, to $496.7 million, or 77 percent of revenue, for
the three months ended March 31, 2012, from $499.7 million, or 78
percent of revenue, for the same period in 2011.

At March 31, 2012, Intelsat’s contracted backlog, representing expected
future revenue under contracts with customers, was $10.5 billion,
compared to $10.7 billion at December 31, 2011.

Intelsat management has reviewed the data pertaining to the use of the
Intelsat network and is providing revenue information with respect to
that use by customer set and service type in the following tables.
Intelsat management believes this provides a useful perspective on the
changes in revenue and customer trends over time.

Revenue Comparison by Customer Set and Service Type

($ in thousands)

By Customer Set

Three Months Ended

Three Months Ended

March 31,

March 31,

2011

2012

Network Services

$

307,105

48%

$

298,929

46%

Media

198,968

31%

209,895

33%

Government

125,208

20%

128,393

20%

Other

8,907

1%

6,952

1%

$

640,188

100%

$

644,169

100%

By Service Type

Three Months Ended

Three Months Ended

March 31,

March 31,

2011

2012

On-Network Revenues

Transponder services

$

467,283

73%

$

479,959

75%

Managed services

70,947

11%

65,972

10%

Channel

27,296

4%

23,820

4%

Total on-network revenues

565,526

88%

569,751

88%

Off-Network and Other Revenues

Transponder, MSS and other off-network services

59,469

9%

64,434

10%

Satellite-related services

15,193

2%

9,984

2%

Total off-network and other revenues

74,662

12%

74,418

12%

Total

$

640,188

100%

$

644,169

100%

Free Cash Flow From (Used in) Operations and Capital Expenditures

Free cash flow used in operations i was $138.8 million during
the three months ended March 31, 2012. Free cash flow from (used in)
operations is defined as net cash provided by operating activities, less
payments for satellites and other property and equipment (including
capitalized interest). Payments for satellites and other property and
equipment during the three months ended March 31, 2012, totaled $260.9
million.

Our capital expenditure guidance for the periods 2012 through 2014 (“the
Guidance Period”) forecasts capital expenditures during those periods
for ten satellites. This is comprised of one satellite recently
launched, seven satellites currently in development and two satellites
expected to be ordered during the Guidance Period. These satellites are
expected to be launched from 2012 to 2015. Consistent with prior
guidance, we expect our 2012 total capital expenditures to range from
approximately $775 million to $850 million. Capital expenditures for
fiscal years 2013 and 2014 are expected to range from $550 million to
$625 million and $525 million to $600 million, respectively. The annual
classification of capital expenditure payments could be affected by the
timing of achievement of satellite manufacturing and launch contract
milestones.

During the three years ending March 31, 2014, we also expect to receive
significant customer prepayments under our existing customer contracts,
and under customer contracts to be signed in the future. Significant
prepayments received in the first quarter of 2012 totaled $37.4 million.
Prepayments are currently expected to range from $150 million to $200
million in 2012, all under existing contracts. Prepayments are currently
expected to range from $150 million to $200 million in 2013 and $100
million to $150 million in 2014, with the majority of these prepayments
coming from existing customer contracts.

End Notesi In this release, financial measures are
presented both in accordance with GAAP and also on a non-GAAP basis.
EBITDA, Intelsat S.A. Adjusted EBITDA, free cash flow from (used in)
operations and related margins included in this release are non-GAAP
financial measures. Please see the consolidated financial information
below for information reconciling non-GAAP financial measures to
comparable GAAP financial measures.

Conference Call Information

Intelsat management will host a conference call with investors and
analysts at 11:00 a.m. EDT on Tuesday, May 8, 2012 to discuss the
company’s financial results for the three months ended March 31, 2012.
Access to the live conference call will also be available via the
Internet at the Intelsat Web site: www.intelsat.com/investors/events.
To participate on the live call, North America-based participants should
call (866) 510-0711. Participants outside the United States and Canada
should call +1 (617) 597-5379. The participant pass code is 31639049.
Participants will have access to a replay of the conference call through
May 15, 2012. The replay number for North America-based participants is
(888)286-8010 and for other participants is +1 (617) 801-6888. The
participant pass code for the replay is 13877633.

About Intelsat

Intelsat is the leading provider of satellite services worldwide. For
over 45 years, Intelsat has been delivering information and
entertainment for many of the world’s leading media and network
companies, multinational corporations, Internet Service Providers and
governmental agencies. Intelsat’s satellite, teleport and fiber
infrastructure is unmatched in the industry, setting the standard for
transmissions of video, data and voice services. From the globalization
of content and the proliferation of HD, to the expansion of cellular
networks and broadband access, with Intelsat, advanced communications
anywhere in the world are closer, by far.

Intelsat Safe Harbor Statement: Some of the statements in this news
release constitute "forward-looking statements" that do not directly or
exclusively relate to historical facts. The forward-looking statements
made in this release reflect Intelsat's intentions, plans, expectations,
assumptions and beliefs about future events and are subject to risks,
uncertainties and other factors, many of which are outside of Intelsat's
control. Important factors that could cause actual results to differ
materially from the expectations expressed or implied in the
forward-looking statements include known and unknown risks. Some of the
factors that could cause actual results to differ from historical
results or those anticipated or predicted by these forward-looking
statements include: risks associated with operating our in-orbit
satellites; satellite launch failures, satellite launch and construction
delays and in-orbit failures or reduced performance; potential changes
in the number of companies offering commercial satellite launch services
and the number of commercial satellite launch opportunities available in
any given time period that could impact our ability to timely schedule
future launches and the prices we pay for such launches; our ability to
obtain new satellite insurance policies with financially viable
insurance carriers on commercially reasonable terms or at all, as well
as the ability of our insurance carriers to fulfill their obligations;
possible future losses on satellites that are not adequately covered by
insurance; U.S. and other government regulation; changes in our
contracted backlog or expected contracted backlog for future services;
pricing pressure and overcapacity in the markets in which we compete;
inadequate access to capital markets; the competitive environment in
which we operate; customer defaults on their obligations to us; our
international operations and other uncertainties associated with doing
business internationally; and litigation. Known risks include, among
others, the risks included in Intelsat’s annual report on Form 10-K for
the year ended December 31, 2011 and its other filings with the U.S.
Securities and Exchange Commission, the political, economic and legal
conditions in the markets we are targeting for communications services
or in which we operate and other risks and uncertainties inherent in the
telecommunications business in general and the satellite communications
business in particular. Because actual results could differ materially
from Intelsat's intentions, plans, expectations, assumptions and beliefs
about the future, you are urged to view all forward-looking statements
contained in this news release with caution. Intelsat does not undertake
any obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

INTELSAT S.A.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands)

Three Months

Three Months

Ended

Ended

March 31, 2011

March 31, 2012

Revenue

$

640,188

$

644,169

Operating expenses:

Direct costs of revenue (exclusive of depreciation and amortization)

105,023

105,010

Selling, general and administrative

51,599

50,966

Depreciation and amortization

195,002

186,871

(Gain) loss on derivative financial instruments

(1,714

)

9,858

Total operating expenses

349,910

352,705

Income from operations

290,278

291,464

Interest expense, net

348,790

311,431

Loss on early extinguishment of debt

(168,229

)

-

Earnings from previously unconsolidated affiliates

120

-

Other income, net

3,877

2,903

Loss before income taxes

(222,744

)

(17,064

)

Provision for (benefit from) income taxes

(6,986

)

7,204

Net loss

(215,758

)

(24,268

)

Net (income) loss attributable to noncontrolling interest

160

(181

)

Net loss attributable to Intelsat S.A.

$

(215,598

)

$

(24,449

)

INTELSAT S.A.

UNAUDITED RECONCILIATION OF NET LOSS TO EBITDA

($ in thousands)

Three Months

Three Months

Ended

Ended

March 31,

March 31,

2011

2012

Net loss

$

(215,758

)

$

(24,268

)

Add (Subtract):

Interest expense, net

348,790

311,431

Loss on early extinguishment of debt

168,229

-

Provision for (benefit from) income taxes

(6,986

)

7,204

Depreciation and amortization

195,002

186,871

EBITDA

$

489,277

$

481,238

EBITDA Margin

76

%

75

%

Note:

EBITDA consists of earnings before net interest, gain (loss) on early
extinguishment of debt, taxes and depreciation and amortization. Given
our high level of leverage, refinancing activities are a frequent part
of our efforts to manage costs of borrowing. Accordingly, we consider
(gain) loss on early extinguishment of debt an element of interest
expense. EBITDA is a measure commonly used in the FSS sector, and we
present EBITDA to enhance the understanding of our operating
performance. We use EBITDA as one criterion for evaluating our
performance relative to that of our peers. We believe that EBITDA is an
operating performance measure, and not a liquidity measure, that
provides investors and analysts with a measure of operating results
unaffected by differences in capital structures, capital investment
cycles and ages of related assets among otherwise comparable companies.
However, EBITDA is not a measure of financial performance under U.S.
GAAP, and our EBITDA may not be comparable to similarly titled measures
of other companies. EBITDA should not be considered as an alternative to
operating income (loss) or net income (loss), determined in accordance
with U.S. GAAP, as an indicator of our operating performance, or as an
alternative to cash flows from operating activities, determined in
accordance with U.S. GAAP, as an indicator of cash flows, or as a
measure of liquidity.

INTELSAT S.A.

UNAUDITED RECONCILIATION OF NET LOSS TO

INTELSAT S.A. ADJUSTED EBITDA

($ in thousands)

Three Months

Three Months

Ended

Ended

March 31,

March 31,

2011

2012

Net loss

$

(215,758

)

$

(24,268

)

Add (Subtract):

Interest expense, net

348,790

311,431

Loss on early extinguishment of debt

168,229

-

Provision for (benefit from) income taxes

(6,986

)

7,204

Depreciation and amortization

195,002

186,871

Intelsat S.A. EBITDA

489,277

481,238

Add (Subtract):

Compensation and benefits

2,330

1,167

Management fees

6,217

6,266

Earnings from previously unconsolidated affiliates

(120

)

-

(Gain) loss on derivative financial instruments

(1,714

)

9,858

Non-recurring and other non-cash items

3,735

(1,814

)

Intelsat S.A. Adjusted EBITDA

$

499,725

$

496,715

Intelsat S.A. Adjusted EBITDA Margin

78

%

77

%

Note:

Intelsat calculates a measure called Intelsat S.A. Adjusted EBITDA to
assess the operating performance of Intelsat S.A. Intelsat S.A. Adjusted
EBITDA consists of EBITDA of Intelsat S.A. as adjusted to exclude or
include certain unusual items, certain other operating expense items and
certain other adjustments as described in the table above. Our
management believes that the presentation of Intelsat S.A. Adjusted
EBITDA provides useful information to investors, lenders and financial
analysts regarding our financial condition and results of operations,
because it permits clearer comparability of our operating performance
between periods. By excluding the potential volatility related to the
timing and extent of non-operating activities, such as impairments of
asset value and gains (losses) on derivative financial instruments, our
management believes that Intelsat S.A. Adjusted EBITDA provides a useful
means of evaluating the success of our operating activities. We also use
Intelsat S.A. Adjusted EBITDA, together with other appropriate metrics,
to set goals for and measure the operating performance of our business,
and it is one of the principal measures we use to evaluate our
management’s performance in determining compensation under our incentive
compensation plans. Adjusted EBITDA measures have been used historically
by investors, lenders and financial analysts to estimate the value of a
company, to make informed investment decisions and to evaluate
performance. Our management believes that the inclusion of Intelsat S.A.
Adjusted EBITDA facilitates comparison of our results with those of
companies having different capital structures.

Intelsat S.A. Adjusted EBITDA is not a measure of financial performance
under U.S. GAAP and may not be comparable to similarly titled measures
of other companies. Intelsat S.A. Adjusted EBITDA should not be
considered as an alternative to operating income (loss) or net income
(loss), determined in accordance with U.S. GAAP, as an indicator of our
operating performance, or as an alternative to cash flows from operating
activities, determined in accordance with U.S. GAAP, as an indicator of
cash flows, or as a measure of liquidity.